Africa has emerged as a frontier for the new online consumer class, representing an estimated 10 million new consumers in 2024 and trailing only Asia as a region, according to the new annual Beyond Borders digital payments and commerce report by EBANX, a global fintech company that connects local payment methods from Africa, Latin America, and India to global digital commerce.
Rising markets in Africa, Asia, and Latin America are driving future consumption and represent 70% of the 109 million people worldwide who are entering the consumer class this year, per the World Data Lab. This increasingly new face of the global consumer will have major implications for the growth of digital commerce, payments, and the dominance of B2B payments.
Africa’s digital markets are still nascent but expanding swiftly
While digital commerce is growing by 13% per year in developed countries, online sales are expanding more rapidly in Africa at a pace of 25%, according to Payments and Commerce Market Intelligence (PCMI). By 2026, the digital commerce market is expected to reach $72 billion in total value in its top five markets: Egypt, Kenya, Morocco, Nigeria, and South Africa. Over the next decade, Africa will add more to consumer spending than Europe.
Digitisation is reshaping African markets with access to the Internet projected to become nearly universal in some regions by 2028. The most dramatic rise is anticipated in Egypt, where internet penetration is expected to more than double, reaching 98%.
However, only 44% of African adults make online purchases, per Insider Intelligence and PCMI data, presenting a huge untapped potential for growth. Online retail dominates Africa’s digital commerce landscape, accounting for 58% of the digital volume in 2023 across key countries such as Egypt, Kenya, Morocco, Nigeria, and South Africa.
Alternative Payment Methods dominate card payments in Africa
As the vast majority of Africans lack access to traditional financial services, alternative payment methods (APMs) – anything other than credit or debit cards – have exploded in popularity to meet untapped demand.
Compared to Latin America and India, Africa has the largest share of APMs in digital commerce, accounting for 69% of the total value, compared to card payments which stand at 31%. Mobile money holds a 5% share in Africa’s five top economies but with significant usage in countries like Kenya, where its penetration is almost universal, particularly in integrating instant payments. While cash payment remains the preferred payment method in Africa’s digital commerce with a 30% penetration compared to 9% in Latin America and 11% in India, APMs are poised to take further market share in the coming years.
“The future of payments in rising markets is instant. Payments in emerging markets like Africa are mobile-first and increasingly not card-based. It’s these alternative payment methods that are driving not only financial inclusion but digital commerce from Latin America to Africa to India,” says Wiza Jalakasi, Director of Africa Market Development at EBANX.
B2B payments surge with the rise of digital marketplaces
An estimated 70% of worldwide B2B transactions remain manual and lack seamless flows. This constitutes a massive opportunity, especially in rising markets like Africa, Latin America, and Asia, where B2B digital payments are growing faster than the global rate of 11% annually. In these regions, they are developing at a 14% annual rate through 2027. By this year, these regions are expected to constitute 40% of the total value of B2B payments made online worldwide, per Capgemini Research Institute.
B2B transactions are gaining traction in Africa. In Kenya, 42% of businesses make online purchases, according to OECD and UNCTAD. These payments are also partly on the rise due to the proliferation of B2B marketplaces which have emerged across the region, operating in countries like Egypt, Morocco, Nigeria, Rwanda, Tanzania, and Uganda, as a strategic solution to reduce logistical costs and eliminate intermediaries.
According to a GSMA report, B2B marketplaces have the advantage of facilitating bulk payments and deliveries, which reduces both effort and cost. Moreover, the report highlights that B2B platforms experience lower customer attrition rates compared to B2C e-commerce, with churn rates at approximately 40% versus 80%, indicating a higher level of seller retention in B2B platforms